Investing
PPF Calculator – A tool to calculate your Maturity Returns
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A PPF calculator is for everyone who is either currently investing in PPFs or planning to do so in years to come. It helps you get out of your indecisiveness about how much
A PPF calculator is for everyone who is either currently investing in PPFs or planning to do so in years to come. It helps you get out of your indecisiveness about how much investment amount should you begin with and how much returns you shall earn on the invested amount. Furthermore, once you have decided on the investment amount for a regular period, the PPF calculator takes the 15-year period and the current interest rates and presents the maturity value to you. Let us understand this tool in detail.
An online PPF calculator is a tool that helps you calculate the returns on your PPF investment scheme. Public Provident Fund or PPF helps you mobilise your savings and accumulate wealth for retirement. Currently, you can earn interest at the rate of 7.1% on PPF. The fact that the interest is compounded annually on PPF makes it a lucrative investment option. However, manually calculating interest and returns on PPF can be quite complicated. That’s where an online PPF calculator comes in!
Let’s dive into how a PPF calculator simplifies the calculations of interest and returns on PPF.
PPF calculators are easy to use. A lot easier than calculating interests and returns manually! You can follow the steps listed below to use the PPF calculator:
Step 1: Enter the yearly amount you want to invest in the public provident fund.
Step 2: Enter the time period for which you want to invest. The PPF calculator automatically takes the 15 years as an investment period since PPF accounts have a lock-in period of 15 years.
Step 3: Enter the current rate of interest applicable to the public provident fund.
Once you have entered the above details, the Public Provident Fund calculator displays the results, including the total amount you have invested, the total interest you have earned, and the maturity value.
Let us see the formula that is used to calculate this figure.
The interest on public provident funds is compounded annually. The formula used to calculate returns at the time of maturity is given below:
F = P[({(1+i)^n}-1)/i]
Here, the variables represent the following:
F is the maturity value of PPF
I is the rate of interest
P represents the annual instalments
N is the time period in years
The formula given above indicates that – the higher the investment period, the higher will be the returns that you earn.
For example, if you invest Rs. 2,00,000 in your PPF investment account for a period of 15 years at the current interest rate of 7.1%, then the maturity value at the end of the investment period will be Rs. 57,63,698.
The points listed below highlight the benefits of using an online PPF calculator:
Listed below are the points you must keep in mind before you start investing in public provident funds:
Can the PPF account be transferred to another bank or branch?
Yes. You have the freedom to transfer your PPF account to another bank branch.
How much interest can PPF accounts earn you?
The Central Government of India determines the rate of interest you will earn on your PPF investments. Currently, the rate of interest on PPF is 7.1% per annum.
When does a PPF investment mature?
The maturity of PPF investments is attained after a lock-in period of 15 years. Once the 15-year period is over, you can withdraw your maturity value.
What are the benefits offered by PPF?
PPF investments guarantee you fixed returns, interest accrual, long-term investment opportunities, and even tax benefits.
What is the minimum lock-in period for PPF?
The minimum lock-in period for PPF investments is 15 years.
What are the tax obligations on PPF?
The PPF investment is tax-free, including the maturity value and interest amount. You don’t have to pay any tax for up to Rs 1.5 lakh annually.
A Public Provident Fund (PPF) account is a long-term savings scheme in India that offers tax benefits and attractive interest rates, helping individuals save for retirement.
The lock-in period for a Public Provident Fund (PPF) account is 15 years, during which the funds cannot be withdrawn.
The current interest rate for Public Provident Fund (PPF) accounts is 7.1% per annum, compounded annually.
Investments in a Public Provident Fund (PPF) account are eligible for tax deductions under Section 80C of the Income Tax Act in India.
The maturity value of a Public Provident Fund (PPF) account is the total amount accumulated at the end of the 15-year term, including principal and interest.
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